francesca's® Reports First Quarter Fiscal Year 2016 Financial Results
- Net sales increased 12% to
$106.1 million - Comparable sales increased 2%, including an ecommerce comparable sales increase of 38%
- Diluted earnings per share was
$0.18
Commenting on the second quarter and full year 2016 outlook,
FIRST QUARTER RESULTS
Net sales increased 12% to
Gross profit, as a percentage of net sales, decreased to 46.3% from 47.3% in the prior year quarter. This decrease is attributable to 60 basis points decrease in merchandise margin and 30 basis points deleveraging of occupancy costs. The decrease in merchandise margin was due to increased clearance activity and sales mix changes during the quarter compared to the same period last year.
Selling, general and administrative expenses ("SG&A") increased 14% to
Income from operations was
BALANCE SHEET SUMMARY
Total cash and cash equivalents at the end of the quarter were
We ended the quarter with
During the first quarter, we repurchased approximately 925,000 shares of our common stock at a cost of
SECOND QUARTER AND FISCAL YEAR 2016 GUIDANCE
For the second quarter ending
For the full year ending
Capital expenditures for fiscal year 2016 are
expected to be in the range of
Conference Call Information
A conference call to discuss the first quarter fiscal year 2016 results is scheduled for
Forward-Looking Statements
Certain statements in this release are "forward-looking statements" made pursuant to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995, as amended. Such forward-looking statements reflect our current expectations or beliefs concerning future events and are subject to various risks and uncertainties that may cause actual results to differ materially from those that we expected. These risks and uncertainties include, but are not limited to, the following: the risk that we cannot anticipate, identify and respond quickly to changing fashion trends and customer preferences; our ability to attract a sufficient number of customers to our boutiques or sell sufficient quantities of our merchandise through
our ecommerce business; our ability to successfully open and operate new boutiques each year; and our ability to efficiently source; distribute additional merchandise quantities necessary to support our growth; and our ability to attract and integrate a new President and Chief Executive Officer. For additional information regarding these and other risks and uncertainties that could cause actual results to differ materially from those contained in our forward-looking statements, please refer to "Risk Factors" in our Annual Report on Form 10-K for the year ended
About
francesca's® is a growing specialty retailer which operates a nationwide-chain of boutiques providing customers a unique, fun and personalized shopping experience. The merchandise assortment is a diverse and balanced mix of apparel, jewelry, accessories and gifts and home. Today francesca's® operates 646 boutiques in 48 states and the
Francesca's
Consolidated Statements of Operations
(In Thousands, Except Per Share Amounts and Percentages)
Thirteen Weeks Ended | |||||||||||||||||||||||||||||||||||||||||||||
Variance | |||||||||||||||||||||||||||||||||||||||||||||
In USD | As a % of Net Sales(1) | In USD | As a % of Net Sales(1) | In USD | % | Basis Points | |||||||||||||||||||||||||||||||||||||||
Net sales | $ | 106,113 | 100.0 | % | $ | 95,011 | 100.0 | % | $ | 11,102 | 12 | % | - | ||||||||||||||||||||||||||||||||
Cost of goods sold and occupancy costs | 56,983 | 53.7 | % | 50,118 | 52.7 | % | 6,865 | 14 | % | 100 | |||||||||||||||||||||||||||||||||||
Gross profit | 49,130 | 46.3 | % | 44,893 | 47.3 | % | 4,237 | 9 | % | (100 | ) | ||||||||||||||||||||||||||||||||||
Selling, general and administrative expenses | 37,666 | 35.5 | % | 33,003 | 34.7 | % | 4,663 | 14 | % | 80 | |||||||||||||||||||||||||||||||||||
Income from operations | 11,464 | 10.8 | % | 11,890 | 12.5 | % | (426 | ) | (4 | )% | (170 | ) | |||||||||||||||||||||||||||||||||
Interest expense | (109 | ) | (0.1 | )% | (110 | ) | (0.1 | )% | 1 | 1 | % | - | |||||||||||||||||||||||||||||||||
Other income | - | 0.0 | % | (66 | ) | (0.1 | )% | 66 | 100 | % | 10 | ||||||||||||||||||||||||||||||||||
Income before income tax expense | 11,355 | 10.7 | % | 11,714 | 12.3 | % | (359 | ) | (3 | )% | (160 | ) | |||||||||||||||||||||||||||||||||
Income tax expense | 4,274 | 4.0 | % | 4,473 | 4.7 | % | (199 | ) | (4 | )% | (70 | ) | |||||||||||||||||||||||||||||||||
Net income | $ | 7,081 | 6.7 | % | $ | 7,241 | 7.6 | % | $ | (160 | ) | (2 | )% | (90 | ) | ||||||||||||||||||||||||||||||
(1) Percentage totals or differences in the above table may not equal the sum or difference of the components due to rounding. | |||||||||||||||||||||||||||||||||||||||||||||
Diluted earnings per share | $ | 0.18 | $ | 0.17 | |||||||||||||||||||||||||||||||||||||||||
Weighted average diluted share count | 40,400 | 42,418 | |||||||||||||||||||||||||||||||||||||||||||
Comparable sales change | 2 | % | (2 | )% |
Francesca's
Consolidated Balance Sheets
(In thousands, except share
amounts)
ASSETS | ||||||||||||
Current assets: | ||||||||||||
Cash and cash equivalents | $ | 35,421 | $ | 56,224 | $ | 46,119 | ||||||
Accounts receivable | 13,316 | 9,580 | 11,858 | |||||||||
Inventories | 34,799 | 31,541 | 31,395 | |||||||||
Deferred income taxes | 6,557 | 6,411 | 5,288 | |||||||||
Prepaid expenses and other current assets | 6,649 | 7,013 | 5,547 | |||||||||
Total current assets | 96,742 | 110,769 | 100,207 | |||||||||
Property and equipment, net | 79,056 | 77,894 | 77,114 | |||||||||
Deferred income taxes | 4,333 | 3,847 | 3,623 | |||||||||
Other assets, net | 1,155 | 1,067 | 1,731 | |||||||||
TOTAL ASSETS | $ | 181,286 | $ | 193,577 | $ | 182,675 | ||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||||
Current liabilities: | ||||||||||||
Accounts payable | $ | 11,174 | $ | 14,305 | $ | 16,280 | ||||||
Accrued liabilities | 14,858 | 16,328 | 13,699 | |||||||||
Total current liabilities | 26,032 | 30,633 | 29,979 | |||||||||
Landlord incentives and deferred rent | 37,531 | 36,552 | 36,739 | |||||||||
Total liabilities | 63,563 | 67,185 | 66,718 | |||||||||
Commitments and contingencies | ||||||||||||
Stockholders' equity: | ||||||||||||
Common stock - | 462 | 459 | 455 | |||||||||
Additional paid-in capital | 108,737 | 107,693 | 105,000 | |||||||||
Retained earnings | 108,637 | 101,556 | 70,645 | |||||||||
(100,113 | ) | (83,316 | ) | (60,143 | ) | |||||||
Total stockholders' equity | 117,723 | 126,392 | 115,957 | |||||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 181,286 | $ | 193,577 | $ | 182,675 |
Francesca's
Consolidated Statements of Cash Flows
(In thousands)
Thirteen Weeks Ended | ||||||||
Cash Flows Provided by Operating Activities: | ||||||||
Net income | $ | 7,081 | $ | 7,241 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 4,649 | 3,822 | ||||||
Stock-based compensation expense | 1,052 | 793 | ||||||
Excess tax benefit from stock-based compensation | (22 | ) | (64 | ) | ||||
Loss on sale of assets | 88 | 128 | ||||||
Deferred income taxes | (838 | ) | (1,875 | ) | ||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | (3,714 | ) | 485 | |||||
Inventories | (3,258 | ) | (7,594 | ) | ||||
Prepaid expenses and other assets | 214 | 460 | ||||||
Accounts payable | (2,862 | ) | 6,543 | |||||
Accrued liabilities | (1,470 | ) | 1,795 | |||||
Landlord incentive and deferred rent | 979 | 3,862 | ||||||
Net cash provided by operating activities | 1,899 | 15,596 | ||||||
Cash Flows Used in Investing Activities: | ||||||||
Purchase of property and equipment | (5,121 | ) | (8,721 | ) | ||||
Others | 4 | - | ||||||
Net cash used in investing activities | (5,117 | ) | (8,721 | ) | ||||
Cash Flows (Used in) Provided by Financing Activities: | ||||||||
Proceeds from the exercise of stock options | 178 | 109 | ||||||
Excess tax benefit from stock-based compensation | 22 | 64 | ||||||
Repurchases of common stock | (17,785 | ) | - | |||||
Net cash (used in) provided by financing activities | (17,585 | ) | 173 | |||||
Net (decrease) increase in cash and cash equivalents | (20,803 | ) | 7,048 | |||||
Cash and cash equivalents, beginning of year | 56,224 | 39,071 | ||||||
Cash and cash equivalents, end of period | $ | 35,421 | $ | 46,119 | ||||
Supplemental Disclosures of Cash Flow Information: | ||||||||
Cash paid for income taxes | $ | 6,653 | $ | 1,763 | ||||
Interest paid | $ | 47 | $ | 47 |
Francesca's
Supplemental Information
Quarterly Sales by Merchandise Category
Thirteen Weeks Ended | Variance | |||||||||||||||
In Dollars | % | |||||||||||||||
(in thousands, except percentages) | ||||||||||||||||
Apparel | $ | 54,892 | $ | 48,170 | $ | 6,722 | 14 | % | ||||||||
Jewelry | 24,062 | 21,972 | 2,090 | 10 | % | |||||||||||
Accessories | 16,046 | 15,379 | 667 | 4 | % | |||||||||||
Gifts and home | 11,327 | 9,837 | 1,490 | 15 | % | |||||||||||
Merchandise Sales | 106,327 | 95,358 | 10,969 | 12 | % | |||||||||||
Others(1) | (214 | ) | (347 | ) | 133 | 38 | % | |||||||||
Net sales | $ | 106,113 | $ | 95,011 | $ | 11,102 | 12 | % |
(1) Includes gift card breakage income, shipping and change in return reserve.
Quarterly Comparable Sales
FY 2016 | FY 2015 | FY 2014 | |||||||||
Q1 | 2 | % | (2 | )% | (7 | )% | |||||
Q2 | (4 | )% | (7 | )% | |||||||
Q3 | 4 | % | (6 | )% | |||||||
Q4 | 11 | % | 1 | % | |||||||
Fiscal year | 3 | % | (5 | )% | |||||||
CONTACT:Source:ICR, Inc. Jean Fontana 646-277-1214 CompanyKelly Dilts 832-494-2236 kelly.dilts@francescas.com / IR@francescas.com
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